Levels of the Stock Market
Throughout its history the stock market has been subject to different highs and lows that have been both predictive and representative of the activity of the greater economy. Looking at some of the more notable closing levels of the market throughout its modern history will help to reveal both our economic history and the likely course of our future economy. From boom to bust, the stock market has seen wildly different levels.
Other People Are Reading
-
1929
-
The American stock market in the 1920s experienced an unprecedented boom, driven by the growth in the economy from new innovations like the radio and automobile. On Sept. 3, 1929, the Dow Jones closed at a record level of 381.2. On "Black Tuesday" of Oct. 29, the Dow began a month-long decline that would see it reach the lowest level of the century. This crash both preceded and partly caused the Great Depression.
1987
-
The American stock market experienced another period of boom in the 1980s, caused by growth in the economy from innovations such as the personal computer. Then on "Black Monday,"--Oct. 19, 1987--stock markets around the world experienced the largest crash since 1929. The Dow fell 508 points to close at the level of 1,738.74. The reasons for this crash are debated, as it did not precede the beginning of another larger economic decline.
-
2008
-
Following 1987, stock markets around the world experienced a long period of growth that was fueled by innovations in the world economy such as the Internet and global shipping. On Sept. 16, 2008, the failure of several large financial institutions in the United States started a period of prolonged decline in world stock markets that lasted for several months and many consider a crash. In the week after Oct. 6, 2008, the Dow lost 1,874 points.
Boom and Bust
-
The stock market has experienced numerous periods of both boom and bust throughout its history. Many busts in the market have preceded periods of recession and depression in the wider economy. The larger rule that can be observed over time, however, has been a seemingly inevitable growth in the level of long-term stock value. The history of the stock market's different levels is reason for both optimism in times of bust and caution during booms.
-
References
Resources
- Photo Credit american flag image by Brett Bouwer from Fotolia.com
